Outgoing Central Bank Governor Patrick Honohan has criticised the role of the European Union in Ireland’s economic recovery following the financial crisis.
Professor Honohan, who leaves his role as governor this week, was speaking at the London School of Economics in a lecture entitled ‘Debt and Austerity: Post Crisis Lessons from Ireland’.
He suggested a number of measures the ECB could have taken to ease the financial burden on the country.
He said "reassuring statements" from the ECB about the continued availability of funding for the Irish banks in the immediate aftermath of the crisis would have stemmed the deposit outflow and reduced the urgency of entering a bailout programme.
On the issue of not burning the bondholders, Prof Honohan said the Government "was leaned upon" to avoid burden-sharing with the holders of unguaranteed senior debt in failed banks here.
He argued that even a fraction of the cost of this move, around €5bn, would have made "a valuable contribution" to Ireland’s recovery.
Mr Honohan was also critical of Irish banks in his speech, saying they had been too slow to restructure debt, and he said the level of unresolved, non-performing loans remains too high.
He also said that he did not regret his decision to talk on radio about the uncertainty surrounding whether or not the then Irish government had entered into negotiations with the IMF.
Mr Honohan rang into RTE Radio One's 'Morning Ireland' programme in 2010, amid rumours that the government had gone into talks with the IMF about a financial bailout.
Speaking in London, Mr Honohan said he was not disgareeing with the government, but was rather telling the facts of the situation.
He said he had a statuary responsibility to tell the truth and he did so.
He said his decision to speak did not hasten the country's entry into the bailout and there were already "boots on the ground" in terms of the IMF.
Mr Honohan will be succeeded in the role of Central Bank Governor by Professor Philip Lane.